Calgary Select: Foreign content for registered investments

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Variety is the spice of life

Think beyond Canada this RRSP season

(NC)-The foreign content curtain on registered investments has been lifted, giving Canadian investors unfettered access to a world of investment choices. Yet, according to a BMO Bank of Montreal survey, only two in five Canadians are aware that the government lifted the foreign content restriction and over 70 per cent have no intention of taking advantage of it.

"Judging by the fact that most RRSP investors did not even use a quarter of the 30 per cent available in foreign content, it is unlikely that there will be any major exodus to global markets now that the limit has been lifted," said Linda Knight, Vice President, BMO Mutual Funds. "Yet, with a domestic market that represents less than three per cent of global equity markets and one that historically moves in opposite directions to other markets, it makes sense for diversification reasons, to include more foreign content."

Canadian investors, like investors the world over, see domestic opportunities as familiar, comfortable and more secure. Yet, by concentrating investments within a geographic region and within relatively small markets, investors are in fact making themselves more vulnerable to unpredictable fluctuations.

For those who avoid international markets because of a fear of the unknown, international mutual funds offer a reasonable solution. Mutual funds, such as BMO International Equity Fund, offer diversified exposure to different countries and industry sectors, and are run by professional portfolio managers with the experience and resources required to effectively navigate global markets.

Moreover, detailed information about the performance of various funds and global markets, as well as advice on building and maintaining foreign exposure is readily available through local bank branches. In other words, the world is literally at your door step.